What would Kroger, Alberstons merger mean for grocery shopping, prices in Chicago?

CHICAGO (CBS) — The chief executive officers of Kroger and Albertsons both say their merger would save consumers money.

Kroger CEO Rodney McMullen and Albertsons CEO Vivek Sankaran both took the stand Wednesday at a hearing in U.S. District Court in Portland, Oregon, on the U.S. government’s request for a preliminary injunction that would block the $24.6 billion deal.

The two companies proposed joining forces in October 2022 after Kroger agreed to purchase Albertsons. The Federal Trade Commission sued early this year to prevent the deal, alleging the merger would eliminate competition and raise grocery prices at a time of already high food price inflation.

But Albertsons and Kroger—the parent companies of Chicago’s Jewel-Osco and Mariano’s stores, respectively—say combining the new chains is the key to surviving. Yet, the reality is that consumers themselves just want to survive once they finish shopping—and depending on which expert is talking, the merger may or may not keep consumers dishing out more money.

Ask any customer, and they will let on to how they feel about grocery shopping. Many are not fond of it these days.

“Nothing has gone down,” one shopper said. “It’s all going up.”

On Wednesday, McMullen testified on behalf of Kroger at the court hearing: “The day that we merge is the day that we will begin lowering prices.”

He vowed that the combined company would invest $1 billion to lower prices if the merger goes through.

“It’s good for Chicago. It’s good for Cook County. It’s good for Illinois,” said Burt Flickinger of the Strategic Resource Group, a consumer retail consulting firm.

Flickinger said contrary to the concerns of the FTC, Jewel and Mariano’s operating as one company could reduce prices and likely keep stores open.

“So Kroger’s an operator, and has the size and skill and ability to support the farmers, lower prices to consumers, add 110,000 jobs across America for union workers—including 15,000 in Chicago and Milwaukee alone,” Flickinger said.

And while the companies and the FTC argue it out in court, consumers have no option but to wait and see.

According to the CBS MoneyWatch price tracker, since 2019, the average price of a dozen eggs has risen 126%, while the price of a loaf of bread jumped 54%, and a pound of chicken breast rose 33%.

But wages also rose 23% over that period, according to the Bureau of Labor Statistics.

“But that’s not how a lot of consumers think, they just see that grocery bill at the end,” Leo Feler, chief economist for the consumer data company Numerator, told CBS News. “And they’re like, ‘Oh my gosh, this is so expensive.’ And they’re right.” 

The parent companies of Jewel and Mariano’s say the merge is essential to compete with Walmart and Costco stores nationwide.

If the sale goes through, 35 Jewel and Mariano’s stores in Illinois would get sold to C&S Wholesale Grocers, parent company of Piggly Wiggly. Yet C&S said no stores will close.